DELHI:To clear the stock of unsold homes, real-estate developers are willing to wait for 80 per cent of a property’s cost as long as the buyer is ready to pay 20 per cent upfront.

The so called 20:80 scheme that smaller players used to hook buyers is now the marketing mantra of big players such as DLF, Parsvnath and IndiaBulls.

Also called the subvention scheme, it helps the realtor clear inventory and the buyer the time to mobilise funds as he need not pay the EMI for a set period or until getting possession of the property. The catch is that the developer picks the interest tab.

Developers have been facing the pressure of the slowdown, resulting in high debt and low profitability. Most new launches of the listed entities fall in the Rs 45 lakh to Rs 1 crore or mid-tier range.

The scheme, a brainchild of smaller real estate players, has caught on elsewhere in the country, mainly in places Delhi-NCR and Mumbai.

RISING inventory

All this show up the anxiousness of realtors to clear the piling unsold homes especially as new launches have not stopped. The inventory is rising in the Delhi-NCR market that accounts for much of the projects under development.

According to a Knight and Frank research, 33,500 units were launched in the Delhi-NCR residential market alone during the second-half of 2012-13, up 6 per cent over the first half. The market has an estimated 1,40,000 units of unsold inventory, which is approximately 27 per cent of the units under construction.Delhi-NCR and Mumbai Metropolitan Board account for about 80 per cent of the total residential units being developed.

Pradeep Jain, Chairman, Parsvnath Group, said: “We have also launched a 25:75 House of Happiness Scheme. This scheme is applicable on our 20 projects in New Delhi, Greater Noida, Ghaziabad, Sonepat and Dharuhera. We are seeing an overwhelming response and are delighted to see a huge number of first-time buyers.”

Positive response

DLF has also received positive response to its 20:80 scheme. The company expects to garner around Rs 3,500 crore from the new projects to be launched just in Gurgaon. Ashok Tyagi, Chief Financial Officer, said during a conference call that the company expected high net realisation from the 20:80 scheme.

Margin pressure

“Listed developers are under tremendous margin pressures. This scheme gives them enough liquidity but also puts pressure to execute projects faster,” said Manish Mehta, Vice-President, Indiahomes. “For offering such schemes, the nod from the bank is a must. Banks usually look at the credit history and the reputation of the developer. Projects that listed players are offering largely fall in the Rs 50 lakh to Rs 1.5 crore category,” he added.

A banking official pointed out that the scheme had swelled the home loan portfolio despite the risks.

Latest Realty News

DELHI: India has its own unique and integral complexities and business is not an exception to it. Corporations strive for increased efficiency and productivity amidst these complexities. Real estate is an integral ingredient in the formation and growth of all businesses and steadily maturing into a big business itself.

MUMBAI: A common saying goes, to know "stress", organize a person's marriage or endeavor to build a house. Consider the various factors which affect the decision on the purchase or building of a house, they range from vastu, legal documentation, anticipated appreciation in value and maybe even the whims and fancies of the relatives. Clearly, factors which may cost a common man, seeking to obtain a roof over his head, many a nights sleep. Well, thanks to the Finance Act, 2013, the stress has been

DELHI:A slowdown in the real estate sector can spell opportunity for the prepared. Delhi-based publishers, Umraopati Ray, 30, and his wife PriyankaSaxena, also 30, own an apartment at PaschimVihar. As the slowdown in the National Capital Region (NCR) intensified, the young couple went hunting for good deals.

KOLKATA: The Central Government Cabinet approved the Real Estate (Regulation & Development) Bill on 5 June 2013. The aim of the bill is to create a Real Estate Regulatory Authority and an Appellate Tribunal that will act as a watchdog for the housing sector, primarily towards protecting consumer interests while creating an alternative redress mechanism for any disputes that may arise.

DELHI: Landowners in Greater Noida will be hit hard if the Greater Noida Industrial Development Authority (GNIDA) changes its building bylaws as they will either need to build structures on vacant plots or sell them to someone else who will to avoid the plots being confiscated.

MUMBAI: Thane and Navi Mumbai have been listed as “emerging investment hotspots” among eight locations across seven top Indian cities, according to a report released on June 21 by the Confederation of Indian Industry and Jones Lang LaSalle India.

MUMBAI: Redevelopment of housing societies across the city could slow down after the civic administration recently decided to charge a 100% premium to developers who want norms for compulsory open spaces around their buildings relaxed. These concessions are generally sought in case of smaller plots where developers are hard-pressed to leave sufficient open spaces around the built-up area.

BANGALORE: Even though South and East Bangalore are nearing saturation, one area that is still seeing significant real estate action is Sarjapur and the adjoining Sarjapur Road. There are over two lakh IT employees residing in these areas, mostly working in multinational companies situated at the Outer Ring Road (ORR) and IT clusters around Madiwala and Whitefield. Originally a hub for affordable 2 and 3BHK units, Sarjapur is witnessing a growing trend for villas. According to MagicBricks.com

HYDERABAD: Located in the western part of Hyderabad, Srinagar Colony has witnessed continuous real estate development. The consistent demand is generated by the working population of the nearby Madhapur Srinagar Colony which was originally a habitat for government gazette officers. However, the old independent houses of the officers are giving way to new multi-storey apartments built by developers and builders.